Obama’s First Choice

Today, at noon eastern standard time, we have a new president. And after all the pomp and parades and parties are over, President Obama will turn to his first major job, which is to revive our moribund economy, which means attending to getting his stimulus package through Congress.

Almost every economist will tell you the stimulus has to be massive in order to have any real impact. Even Marty Feldstein, who headed Ronald Reagan’s Council of Economic Advisors, told Congress it had to be $800 billion. My own view is at least $900 billion. But a price tag like that scares Republicans and so-called “blue-dog” Democrats who worry about government debt.

So here’s our new president’s strategic choice. He can flight for the biggest stimulus politically possible – twisting arms and counting noses to get a bare majority in the House and sixty votes in the Senate. That’s how Ronald Reagan and George W. Bush got their huge tax cuts, and how Bill Clinton got his first budget through Congress.

Or Obama can aim to get the backing of a much larger majority than he needs to get the stimulus enacted – including a majority of blue dogs and Republicans. To do this he’d likely have to settle for a smaller stimulus package – one that may not be enough to jump-start the economy.

Why would he ever choose the second strategy? Because his goal is not just to get the biggest stimulus package he can squeeze through Congress. It’s to get a Congress that’s mostly united behind whatever stimulus package emerges. This would ensure that Republicans and blue-dog Democrats take some ownership of the package, and therefore responsibility for making it work.

If they feel ownership and responsibility, Obama could return to them later if more money is needed, and probably get their backing. Just as important, he starts to build bipartisan support for other things that have to be done in the next few months – keeping the U.S. auto industry
afloat, reducing mortgage foreclosures, and devising new regulations of Wall Street. And he lays the foundation for a more united Congress capable of tackling a new health-care system, a new system for reducing carbon emissions, and reform of Social Security and Medicare.

It’s not the strategy his predecessors used to get their economic plans enacted. It’s not hardball politics, and it may not be the best move for the economy in the short run. But given the challenges our new president and our nation face over the long run, this may be the smartest politics and smartest economics.

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About Robert Reich 547 Articles

Robert Reich is the nation's 22nd Secretary of Labor and a professor at the University of California at Berkeley.

He has served as labor secretary in the Clinton administration, as an assistant to the solicitor general in the Ford administration and as head of the Federal Trade Commission's policy planning staff during the Carter administration.

He has written eleven books, including The Work of Nations, which has been translated into 22 languages; the best-sellers The Future of Success and Locked in the Cabinet, and his most recent book, Supercapitalism. His articles have appeared in the New Yorker, Atlantic Monthly, New York Times, Washington Post, and Wall Street Journal. Mr. Reich is co-founding editor of The American Prospect magazine. His weekly commentaries on public radio’s "Marketplace" are heard by nearly five million people.

In 2003, Mr. Reich was awarded the prestigious Vaclev Havel Foundation Prize, by the former Czech president, for his pioneering work in economic and social thought. In 2005, his play, Public Exposure, broke box office records at its world premiere on Cape Cod.

Mr. Reich has been a member of the faculties of Harvard’s John F. Kennedy School of Government and of Brandeis University. He received his B.A. from Dartmouth College, his M.A. from Oxford University, where he was a Rhodes Scholar, and his J.D. from Yale Law School.

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